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Property/DIY

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Original poster

Buying a house.

22 replies

obimomkanobi · 22/04/2007 16:45

Currently my husband and I rent, we have never been able to afford to get on the property ladder. My in-laws have a property (it belonged to my MIL's father) that they have been trying to sell.It is on the market at £145K and because they want a quick sale they want to take it to auction with a reserve of £130K. Yesterday they asked us if we wanted to buy it at £130K. They have mentioned doing a 'deed of gift' of 15K. Naturally we really want to do this. However we are worried about getting a mortgage. We would need a 100% mortgage and we do have a bit of a dodgy financial history, debt, defaults and CCJ's. We got into a bit of a tight spot about 5 years ago and our finances imploded. My husband earns £34k a year, and on a 'normal' calculator we could borrow up to £139K.I am plucking up the courage to speak to an IFA, but I am scared! Does anyone think that we will possibly get a mortgage? Or is it just a silly pipe dream?

OP posts:

NatalieJane · 22/04/2007 16:49

You should be able to get one, from somewhere, although the interest is likely to be higher than usual, and you may find it easier to obtain through a broker, the broker can aproach companies in the right way so whereas if you aproached them yourself they would turn you down, but a broker could get you an acceptance.

Good luck

MamaG · 22/04/2007 16:50

Yes, my mate just got one through a broker. What have you got to lose by asking? nothing

Original poster

obimomkanobi · 22/04/2007 16:53

Oh my goodness! I am starting to feel hopeful! If we do get I'll invite all of mumsnet round for a party!

OP posts:

franke · 22/04/2007 16:54

Agree that going through a broker would be a good way of investigating all your options - but find an independent broker who takes their fee from the mortgage co. rather than from you. Possibly try John Charcol - I used them a few years ago and found them quite good. Don't be scared - the worst that can happen is that they'll say no but most likely you'll get an offer of a mortgage and then you'll be on the way to buying your first property!

LIZS · 22/04/2007 16:54

So the purchase price would still be 145k but they "gift" you 15k back on completion ? tbh you won't know unless you ask but can you now afford to pay a 100% mortgage back, plus there would be other associated costs - Stamp duty (@ 1% in your case), legal fees, mortgage arrangement fees and survey etc which you pay upfront.

Original poster

obimomkanobi · 22/04/2007 17:05

LIZS

We are paying the best part of a grand a month in rent, so I think that the monthly mortgage repayments would be comparable if not slightly less. Also, we would pay less council tax if we were able to buy this property. As for the upfront fee's, we do have some savings that we could use towards that.

OP posts:

MamaG · 22/04/2007 17:07

ouch at £1k a month!

My mate with bad credit hisotry has just borrowed £93k and repayments will be £900 a month

Just for your info!

Original poster

obimomkanobi · 22/04/2007 17:13

93K and £900 repayments? I guessed we would still be in the 1k ball park.

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LIZS · 22/04/2007 17:14

ouch mamag that must be a huge rate of interest. Bear in mind rates are on the up too.

seb1 · 22/04/2007 17:20

This reply has been deleted

Message deleted by MNHQ. Here's a link to our Talk guidelines.

Original poster

obimomkanobi · 22/04/2007 17:21

I know, the rate rise is a worry. I've just been on a 'bad credit' site and looked at a few figures. I'm veering between feeling quite excited to feeling really hopeless.

OP posts:

NatalieJane · 22/04/2007 18:55

A friend has a mortgage for £73,000 after CCJ's and various other defaults etc. and they pay just over £500. Maybe it depends just how bad the credit history is as too how much higher interest is charged?

zookeeper · 22/04/2007 18:58

you will easily get one obu - go for it!It's not much more of a commitment than renting

LIZS · 22/04/2007 19:56

Sorry zookeeper but that is a pretty naive comment . It is more of a commitment , perhaps not ostensibly in £ terms per month, but in terms of financial risk and general overheads of maintenance, buildings insurance etc compared to renting where the landlord is responsible. There are also obligatory life assurance policies to cover even an interest only mortgage. Do make sure you consider your position carefully obi , once you have more info. Hope you can make it work.

zookeeper · 22/04/2007 20:01

I don't think it is naive in this particular case- they are paying a thousand for rent so a mortgage and overheads will not neccessarily be more. They already have a poor credit rating so if the worse comes to the worse and they fall behind in their payments the house will be repossessed and they will still have a bad credit rating. The threat of repossession would be no less of a threat to their security than a landlord terminating the tenancy.

beckybrastraps · 22/04/2007 20:21

I'm at the cost of MamaG's friend's mortgage.

I would be careful. When we bought our new house the affordability calculator used by our lender was way out of line with what we could realistically afford. We borrowed about what you would like to borrow, on a good interest rate, with dh's salary higher then yours, and we are at the limit of what we can afford. With your credit rating, your repayments are liely to be quite a lot higher. You must get quotes for life insurance and add that on the top. How will you manage if dh loses his job? Do you have the money upfront for the move? Ours cost several thousand pounds. I don't want to sound really negative. And I have no doubt you would get a mortgage. Do talk to an IFA But really, really do your sums yourself as well.

swanseadaddy · 22/04/2007 20:22

google ifa promotion they will tell you 3 closest ifa's in your area, not 100% sure john charcoal are genuinely independent

tribpot · 22/04/2007 20:24

I've used unbiased.co.uk to find an IFA (mine is top notch) - I would dispute the idea of using an IFA who takes their fee from the mortgage company rather than you, in this case they are not truly independent but tied to a number of lenders. Possibly a large number of lenders, granted, but I don't think it's truly independent advice.

beckybrastraps · 22/04/2007 20:24

Sorry, life insurance and buildings insurance. I think that only the buildings cover is necessary (we actually completed on our house before the new life insurance was in place), but I think you would probably want to have it...

pucca · 22/04/2007 20:27

Obi...We did this, dh's credit was a bit dodgy, and we actually bought our house off our IFA (ended up being quite good friends with him) it was a bit of a slog (to get the mortgage) but we got a fairly ok rate with a fixed rate for 3 yrs, we ended up with Birmingham Midshires (part of halifax) so worth remembering that if you go and see a IFA get them to try that company.

The house our IFA "gave" us a gift of deposit, the house was valued at 83K and we bought it off him for 73K (so 10K deposit).

So in effect, we didnt put a deposit down but we had one in a gift of deposit, you would be ok as 10% equals 14.5K so go for it, plus you have the added bonus of not being under pressure to hurry up as much as it your IL's.

pucca · 22/04/2007 20:28

We pay 490 per month on 73K, but remember to say it will be a GIFT OF DEPOSIT.

Original poster

obimomkanobi · 22/04/2007 22:23

Thanks all of you for the advice. We have had an evening of spreadsheets and number crunching. We do realise that there are many extra costs to be factored in. Tomorrow I'll start contacting IFA's and see what they say.

It's exciting and nervewracking at the same time.

OP posts:

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